IRS Official At Center Of Political Scandal Will Retire

Lois Lerner, the head of the IRS division that handles applications for tax-exempt status, listens to opening statements during a hearing before the House Oversight and Government Reform Committee before refusing to testify on May 22.

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Originally published on September 23, 2013 3:20 pm

Lois Lerner, the Internal Revenue Service official who ran the division engulfed in a scandal over special scrutiny of Tea Party and patriot groups seeking tax exemption, will retire.

The scandal involved groups applying for 501(c)(4) status in the period 2010-2012. Organizations with the words "Tea Party" or "patriot" in their names faced more questions and bureaucratic delays, although some progressive groups also encountered bureaucratic hassles, according to an inspector general's report.

In a statement emailed to NPR, the IRS said the problems identified with screening tax-exempt status requests were the result of "mismanagement and poor judgment."

"The IRS is making important progress on fixing the underlying management and organizational deficiencies" identified in the inspector-general's report, the statement said. "Our goal is to restore the public's faith and trust in the tax system."

The agency said it had sent nearly 400,000 pages of documents to Congress and that it looked forward "to continuing to cooperate with Congress and other investigations."

As NPR's Tamara Keith reported in June, 501(c)(4) groups "are allowed to participate in politics, but it can't be their primary activity. Screening applicants for political activity and trying to divine whether they qualify for tax-exempt status is not out of the ordinary. But ultimately, the Tea Party groups were lumped together and fell into a bureaucratic black hole facing excessively long wait times and intrusive questioning, according to the I-G's report."

Since her refusal to answer questions before Congress, Republican lawmakers have repeatedly called for Lerner to be fired.

The Associated Press reports:

"Lerner's revelation ... set off a firestorm at the agency. President Barack Obama forced the acting commissioner to resign and much of the agency's top leadership was replaced. Three congressional committees and the Justice Department launched investigations."

"Lerner initially said the targeting was limited to agents working in a Cincinnati office. Congressional investigations have since discovered evidence that IRS officials in Washington were aware that tea party applications were being delayed for years in some cases while the groups endured sometimes burdensome scrutiny."